Apple buys Lala service

Bloomberg News / December 6, 2009

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SAN FRANCISCO - Apple Inc., the biggest Internet-music seller in the United States, acquired Lala, adding a Web-music service to its iTunes song-downloading business.

Apple confirmed the acquisition of closely held Lala Friday, without disclosing terms.

“Apple buys smaller technology companies from time to time and we generally do not comment on our purpose or plans,’’ said Steve Dowling, a spokesman for Apple.

Unlike iTunes, the Lala service lets users listen to entire songs once for free. Customers can then opt to buy the track for 10 cents and listen to it on the Web.

The music is stored on Internet servers, via the so-called cloud, instead of getting downloaded to a computer.

“There’s a big question in the industry about what will be the dominant way people will obtain music, whether it’s stored in the cloud or whether it will be on a hard drive,’’ said Larry Kenswil, an attorney at Loeb & Loeb in Los Angeles, who’s the former head of Universal Music Group’s digital unit. “Apple is wise to cover its bases because it’s only in the download business.’’